BITCOIN and Ethereum have plummeted $200billion in the last 24 hours after Russia promised to crackdown on the lucrative cryptocurrencies.

The two most-trusted cryptos went into a dramatic freefall on Wednesday with other smaller coins like BNB, Solana and Cardano following suit.

The risks of buying with cryptocurrencies

Investing and making a purchase in cryptocurrencies such as Bitcoin is risky .

Their value is highly volatile and City watchdog the Financial Conduct Authority has warned investors should be prepared to lose all their money.

Investing in cryptocurrencies is not a guaranteed way to make money.

You should also think carefully about making purchases with a cryptocurrency.

For example, Bitcoin has had wild price fluctuations in recent months and the price can change on an almost hourly basis.

The price of a Bitcoin was at $40,258 on January 9, according to Coindesk, but fell to $34,214 just three days later.

That's a 15% drop.

These price swings are risky for a business as you could sell an item for a Bitcoin at one price and the value may drop soon after, leaving you with less money from a sale.

Similarly, the price of Bitcoin has soared by more than 21% since the start of this week so it can be hard for a shopper to get an accurate idea of the price of an item if its value changes on a daily basis.

Bitcoin alone shed almost 10 per cent of its value in the last 24 hours, dropping to £28,774 for the first time in over six months.

Ethereum plummeted between 7 and 11 per cent, wiping millions out of investors' pockets.

Experts claim the shock crash is the result of a crackdown on cryptos from Chinese and Russian governments and the US Federal Reserve wanting to raise interest rates.

Crypto expert Edul Patel claimed the current bottoming-out also had to do with a lack of demand amid soaring inflation in the West, leaving casual investors in a state of panic.

The CEO of Murdex told the Economic Times: "The downward trend is likely to put investors in a chaotic situation.

"The fall of significant cryptos can be attributed to lower demand, inflation, and seasonality. The coming week would be vital for the crypto spectrum."

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It comes as Russian lawmakers attempt to push through legislation to make trading of the lucrative currency illegal.

Parliamentary speak Vyacheslav Volodin revealed this week that politicians were were creating a new regulatory framework that'd ban the production mining or trading of cryptos.

Russia is the third biggest crypto mining nation in the world – and currently has $92billion of assets held in 17 million crypto wallets – with the new law expected to have a massive knock-on affect across virtual currency markets.

Research for CoinCDX, India's largest crypto trading platform, expects the currencies to rise again in the future.

In a statement, it said: "As Russia-one of the largest crypto adopters in the world-announced its plans for a blanket ban on crypto, the digital asset market plunged back into the reds. BTC and ETH took sharp dips, dropping 2.54 per cent and 3.62 per cent respectively over the past 24 hours.

"Other altcoins from BNB, ADA, and SOL also nosedived with yet another economic powerhouse taking a hard stance against crypto.

"While this may be a cause for concern, the crypto industry has weathered through multiple bans, restrictions and regulatory scrutiny over the years but have stood the test of time.

"Looking back at how the sector bounced back shortly after China's crypto ban, we can expect the sell-off to have little long-term impact on crypto's performance besides this brief initial dip."

On Wednesday, Moscow's central bank proposed a blanket ban on the use and creation of all cryptocurrencies within Russia.

In a new report, Russia's central bank said they consider crypto currency as "bearing the hallmarks of a pyramid scheme".

And it warned the bankers believe crypto poses a "threat to the Russian financial system" and undermines the country's economic sovereignty.

It comes as Bitcoin broke new ground in early 2022, soaring to £43,388 per coin following Elon Musk's unrelenting endorsement.

And as China imposed a widespread crypto ban in 2021 that saw miners using high-powered computers expelled from the Asian country.

The central bank insisted it will not outlaw ownership of the crypto for citizens – but trades using the digital cash will be banned.

Bitcoin's price was sent crashing earlier this year after Russia's neighbour Kazakhstan cut the internet amid a wave of unrest.

Kazakhstan – which is the second-largest Bitcoin mining hub behind the US – accounted for 17 per cent of global Bitcoin output power.

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